THE PRESIDENT: Thank you very much, Mayor Rice. And I
want to begin by congratulating Mayor Ashe on a great year as
president. I have enjoyed working with you very much. And I look
forward working with you, Norm, in the year ahead.

I also want to say hello to some of my old friends in
Miami. I see Mayor Daley and Mayor Clark are there. I understand
that Secretary Brown and Secretary Cisneros are also both with you
today.

Let me say before I go forward that I noticed in one of
the previous sessions you had that it was suggested that we don't
need the Department of Housing and Urban Development anymore. Let me
say that I think Henry Cisneros and his whole team have done a
magnificent job, and I don't think we want to send Andrew Cuomo to
the beach just yet. I hope you agree.

I also want to thank all of you for giving me this
chance to speak with you today. I'm very proud that our
administration has worked in an unprecedented partnership with our
cities, our communities, and especially our mayors. You make real
budgets. You deal with real problems. You know the real concerns of
our people as we try to restore the American Dream. I'm looking
forward to our continued cooperation. And I want to keep focused on
the real problems our country faces.

You have heard in the previous speakers who have
appeared before you strands of the great debates now going on in
Washington and throughout our country. There are those who say that
our primary problems are personal and cultural, not economic and
political. There are those who say that the biggest problems we face
are due to the fact that the federal government has too much
authority, and more ought to be given to the state and local level.

Well, I have to say to you that I'm glad to have these
debates. I was making these arguments long before this presidential
election season; indeed, long before I became a candidate for
president in 1992, when I was a governor, working on the values
problems we face, like teen pregnancy and youth violence and all
kinds of personal irresponsibility in our society. You and I know
that unless people do the right things themselves that we can't solve
the problems of our society.

And I was calling for a devolution of responsibility
back to local and state governments long before I ever ran for
President. So these are not just issues of a political season for
me. But let's keep our eyes on what we have to do in terms of the
real problems that you deal with every day. We do have a values
crisis in this country. We need to exalt responsibility and work and
family and community. We need to be less violent, less irresponsible
and less divisive.

We do have an economic problem in this country. We've
got years of stagnant wages and people who are working hard and being
punished for it. We need to grow the middle class and shrink the
under class and empower people to make the most of their own lives.

We've got a governmental problem in this country. We
need a government for the 21st century that is less bureaucratic and
more entrepreneurial and more oriented toward partnerships where more
is done at the grass-roots level.

Now, I believe all that. But the question is, what are
we going to do about it? And if we use a lot of rhetoric to divide
the American people again and to divide the problems we face in terms
of values as against economics, and national against local, instead
of recognizing that what we need is to face these issues and all
their aspects and we need a real hard-nosed partnership, then we'll
be in trouble. After all, the problems you face every day are the
very reasons I ran for President. I believe we had to empower our
people and our communities to meet the demands of change at the
grass-roots level where people live.

Now, there are some in Washington who believe we can
make government work just by juggling programs from the federal
bureaucracies to the state bureaucracies. You and I know that the
right way is to give local governments, community organizations and
individual citizens and their neighborhoods the tools they need, the
resources they need to improve their own lives.

In 1992 I laid out an agenda to send power, capital and,
most important of all, hope to the people who are working hard to
make the most of their communities and their own lives. We still
have a good ways to go, but I am proud that we have kept that
commitment.

Look at what we have already achieved together: We
created the empowerment zones and the enterprise communities,
awarding tax incentives and grants to spur economic growth in 105
communities that also supports good values. We're creating a network
of community development banks and financial institutions to lend,
invest, provide basic banking services in places that need the most
to the people who can do the most to change the social conditions we
all want to change.

We passed final regulations for the Community
Reinvestment Act to help our banks and thrifts make good loans and
investments, to help people rebuild our troubled communities. The
SBA established one-shop -- one-stop capital shops to distribute $3
billion in loans and investments for small and minority businesses
over the next five years. We fought to save the community
development block grants and our economic plan in the face of huge
opposition.

Now, those are the things that we have done together --
just some of the things we've done together. Now it's up to us to
continue a partnership to create jobs, raise incomes, lift living
standards and improve the values and the strength of our communities.
We can do that, and we have done that, working with the new Congress.

I have supported and signed into law, for example, the
bill to minimize the unfunded mandates that tell you what to do
without giving you the resources to do it. I was proud to do that.
But I also want you to know that I vetoed the rescission bill in part
because of the cuts that affect you directly. For example, the
Congress in this rescission bill would cut grants to cities that have
already been obligated to make our water safer. These grants were
already committed, the letters had gone out. To cut them now would
be worse than an unfunded mandate, it would be a defunded mandate.
And I don't intend to let that happen.

Another reason I vetoed the rescission bill is because
the Congress had cut the community development financial institutions
and added language which made it almost impossible for them to
operate. I am proud that we've already awarded one large bank in Los
Angeles and we've got more work to do on that front. We shouldn't
turn back now from a proven commitment that will bring free
enterprise to the most distressed areas of our country.

Now, we have to approach a new budget. And as we do it,
I want to continue to work together with you to seize this
opportunity to build a stronger future for all of our people, to do
it in a way that supports our economic interest and our values, and
works to reform the government and give you more responsibility.

For the first time in a long, long time the leaders of
both political parties now share the will to balance the federal
budget. That's an important issue, and I want to talk about it just
a moment.

We know that that requires some tough calls. But if we
can balance the budget, it will mean in the years ahead there will be
more money to invest in our people, in our cities, and in our future,
and less money that has to be spent just paying interest on
yesterday's debt. The difficult task ahead is for us to have the
will necessary to do it and to cast partisanship aside so that we can
get the job done in a way that helps instead of hurts the long-term
prospects of our people. We need a budget that balances debts and
credits, but also keeps our values in balance. That's what our
responsibility as leaders demand.

We faced that challenge together in the first two years
of our administration, when we cut the deficit by a trillion dollars
in seven years and still were able to invest in the tools that our
communities and our people have to have to compete and win in the
global economy. The work now has to go on.

Now, with that in mind, last week I outlined my plan to
eliminate the deficit in 10 years. My plan cuts federal spending by
$1.1 trillion, on top of the $1 trillion in deficit reduction enacted
in our '93 budget plan. This new budget does not raise taxes.
It is disciplined, it is comprehensive, and it is serious. It won't
be easy, but we need to do it -- and we can.

Our plan proves that you can balance the budget and
still invest in things that will keep America strong and growing,
like education, health care, research and technology.

To accomplish these goals we have to focus on five basic
priorities. First, we've got to help people make the most of their
own lives. That means, while we cut the deficit we should increase
investment in education, not cut it. Second, we have to control
health care costs, but we should do it by strengthening Medicare,
saving Medicaid -- reforming them -- not by slashing services for the
elderly. We can maintain benefits by cutting costs through genuine
reform, including cracking down on the substantial amount of Medicaid
fraud and abuse and giving more incentives for more efficient and
cost-effective ways of delivering care.

Third, we need to cut taxes, but for the middle class,
not for the wealthiest Americans who don't really need it. Fourth,
we can save money by cutting welfare, but we have to do it in a way
that saves enough for investment to move people to work. The
congressional proposals are too tough on children and too weak on
work. We need to be tough on work and supportive of children.

And in that regard, I want to thank all of you there
who, in the spirit of bipartisanship, have come out in support of our
efforts to achieve real welfare reform that moves people from welfare
to work. The bill that was recently introduced in the Senate by
Senators Daschle and others achieves that objective, and those of you
who are supporting it, I am very grateful for that. We can save
funds, but we have to save enough to invest in people, to empower
them to end welfare as we know it; not just to cut people off and not
worry about the consequence to the children.

The fifth principle is to balance the budget in 10
years, not seven. Now, we could do it in seven as some in Congress
want, but there's no reason to inflict the amount of pain that would
cause or to run the risk of recession. A highly respected economic
group out of the Wharton Business School recently estimated that one
of the Republican budgets would actually cause a recession, driving
unemployment to 8.6 percent and delaying balancing the budget by two
years anyway.

Now, in spite of all this, don't let anybody fool you.
Balancing the budget in 10 years will require real cuts; it will
cause real pain. We can and we should discuss where those savings
should be found. We have to decide about whether the savings should
come out of programs like the community development block grants,
which I know are very important to you and which I have strongly
supported. I still believe in them very strongly. But let me be
straight with you. If we don't cut the community development block
grant, then there will have to be some cuts in some other programs
that you and I care about.

We have to do that if we're going to bring the budget
into balance. But let me say again, we should do this -- we should
do this. We never had a huge structural deficit before the 12 years
before I became President, before the years between 1981 and 1993.
And I'll tell you how big the problem is. Right now, today, our
budget would be in balance today if it were not for the interest we
have to pay on the deficit run up between 1981 and 1993 in January.
So we have got to turn this around. We cannot continue something
that we only started 12 years ago.

But I want to remind you there is a big difference
between my plan and the congressional plans. It's the difference
between necessary cuts and unacceptable pain. It's the difference
between a deficit reduction plan that goes to balance budgets and
still invest in our future and one that cuts off our future. It's
the difference between one that will reduce the deficit in ways that
will promote long-term growth and one that will reduce the deficit in
ways that risk a severe, near-term recession.

I am going to fight to avoid cutting education, hurting
people on Medicare, undermining critical investments in our
communities. It would be wrong to sacrifice those investments just
to meet a seven-year deadline when we can get the job in 10 years.
It would be wrong to cut in those areas that will help our people
restore the American Dream, raise our incomes so that we can give a
tax cut to people who don't really need it.

One of our most important challenges is to make sure
that the American people feel more secure in their homes and
neighborhoods as well. And therefore, I thank you again for joining
me in the fight against crime and the fight for the crime bill last
year. Without your support we could not have possibly passed it,
especially given the bitter opposition of some members of Congress to
the assault weapons ban and to giving cities the flexibility that you
need in the prevention funds.

I know some of you had conflicting opinions and
different needs when it came to our plan to provide 100,000 new
police officers. But I believe we have a national crisis on crime
because we don't have enough police officers on the street. Over 30
years we've watched as the violent crime rate tripled and our police
departments only increased by 10 percent. Now we've found the funds
to pay for police in the right way. We cut unnecessary government at
the national level and sent the savings to our communities for more
police officers. That is the kind of bargain the American people
deserve. The philosophy behind that was to do what could be done to
reduce crime.

But I would also remind you, under our plan, we gave
localities enormous flexibility in spending the prevention funds
because you know what works at the local level. It is ironic today
that there are those who are trying to dismantle our national
commitment to put 100,000 police on the street in the name of giving
you more flexibility when less than a year ago they were saying that
giving you more flexibility would lead to widespread abuse in the
spending of federal money.

The truth is that a lot of these programs to give you
more flexibility, from welfare to crime, are really just ways to cut
spending that invests in our future and our economy and our security.
If we'll adopt my budget plan, we can give you more flexibility and
still do those things and balance the budget. Behind all of these
initiatives -- or not just shuffling from federal to state
bureaucracy, but trying to empower our people directly -- is the
philosophy we are using to help our people meet the demands of the
global economy in their own lives.

Some still say, as I said -- let me just give you one
example, finally -- that we ought to trust the federal government to
train our workers. We've got about 70 or 80 different training
programs. Then there are some that say, no, let's give all these
programs to state government. But I say, we shouldn't empower one
bureaucracy over another.

In the future, in every one of your cities, the ability
of the American people who live there to do well in the global
economy will depend upon our ability to directly empower individual
Americans, to directly empower them to make the most of their own
lives, including having a lifetime right to constant re-education and
training.

So let me talk with you, finally, today about an effort
that we're making now that would give people those most important
tools they need to build better lives. It is central to the rebirth
of your cities. If you have more people who can get good jobs and
who can earn higher incomes, then so many of the problems that you
face, so many of the problems you face will be lessened.

So here's how I want our people to get those jobs and to
keep them in this global economy that is always demanding more and
more of them. I want to do something that's modeled on the G.I.
Bill. Fifty years ago, as World War II was coming to an end, our
country created the G.I. Bill that gave a whole generation of
Americans the education to create an unprecedented prosperity.
What I have proposed today is a G.I. Bill for America's workers -- to
help a whole new generation of Americans secure decent lives and
decent incomes for themselves and their families.

The principle is simple: Education and training can no
longer stop at high school We've all got to keep on learning to keep
pace with the dynamic global economy. And the best way to make it
happen is to put the power directly in the hands of individual
Americans who have to do the learning. Today there is a confusing
maze of 70 -- at least 70 -- job-training programs sponsored by the
federal government. What we want to do is to consolidate them into a
single grant and that grant will have but one purpose -- to put money
directly into the hands of people who need it.

Through our School-To-Work initiative, we'll continue to
help high school students or graduates who want further training get
that in order to compete. Through our skilled grants we'll help the
worker who has lost a job who is grossly under-paid and
under-employed to take the responsibility to get a new leg up in the
global economy. We also want to make it easier and cheaper for
workers to get loans to build on their education. That means
expanding, not cutting, Pell Grants and direct student loans. And it
means the right kind of tax cuts -- not tax cuts for people who don't
need them, but tax cuts for middle-income Americans who can use the
money to invest in their training and their children's education. We
propose a tax cut for the cost of all post-high-school education.

Now, these things will make opportunity real for more
Americans, and make opportunity real for more of your cities. The
G.I. Bill for America's workers will make it possible for more and
better jobs for people who live in your communities, and will help
attract jobs and expand your economic base.

You think about it. If everyone considering investing
in your communities knew that every person who wanted a job could get
the job training in a direct voucher from the federal government
which could go to your community colleges to get the kind of training
they need, that would help us to do what you need to do. We want to
make you a full partner in designing a system of adult education and
job placement. That will mean that community colleges, which are the
new life-blood for so many of your citizens, will be even stronger
and, more importantly, will mean that you will be able to use this as
a tool to develop your own economies.

I believe this approach will play a major role in our
goal, our common goal to restore the American Dream. I'm pleased
that this morning in The Los Angeles Times there was an article that
I hope you've all had a chance to read, written by Al From, the
president of the Democratic Leadership Council, a Democrat; and by
Jack Kemp, the former Secretary of Housing and Urban Development, a
Republican. Here's what they say about our G.I. Bill.

They say -- quote -- "It offers an all-too-rare
opportunity for members of Congress of both parties to discard
partisan squabbling and cooperate on a measure that can help
hard-working Americans acquire the skills they need to lift their
incomes. The needs of this great country of ours demand that all of
us, Democrats and Republicans alike, ask ourselves the question: Can
we make it work? The correct answer is: We must."

I could not have said it better. Al From and Jack Kemp,
the Republicans and the Democratic mayors out there who are listening
to me today, just remember, as we balance the federal budget, as we
help all Americans prepare for a bright future, we have got to seize
this moment of great opportunity. We've got to put our national
priorities above party politics and put the American people first.

That's what I was trying to do when I had that
conversation in New Hampshire with the Speaker of the House the other
day.

This is a moment of immense promise. We can renew the
American Dream. But we have to work together, and we have to avoid
trying to divide our people by false choices. Good economics, sound
values, strong communities, a government that works -- that's what we
really need, and I will work with you to achieve it.

Thank you very much. (Applause.)

MAYOR ASHE: Mr. President, we are genuinely pleased and
warmed by your remarks. And we have three questions that we would
like to pose to you. First, I will ask a question as President, and
then Mayor Daley, the Vice President of the U.S. Conference of
Mayors; and then Paul Helmke, the Chairman of the Advisory Committee
for the U.S. Conference of Mayors.

Our bipartisan Conference of Mayors has endorsed Senator
Daschle's bill that gets at the real issues of welfare reform. We
support the greater accountability, but we also need training, child
care, and job creation. Can you tell us what the prospects are for
the real welfare reform this year? And how can we as mayors make a
difference since we may feel the effects of some of the draconian
measures that are going on?

THE PRESIDENT: I think the prospects for real welfare
reform really depend upon whether the Senate Republicans, or at least
the block of moderate Republicans who understand these issues, will
work with the Democrats on something like the Daschle bill.

You know, there is a hard core in the Senate who are
demanding that there be no welfare reform bill unless all aid is cut
off to unmarried mothers and their children born out of wedlock, even
though the Catholic Church, the National Governors Association, your
group, everybody I know says that that would be unfair to children.

If the rest of the Republicans will leave that block and
join with Senators Daschle and Breaux and Mikulski and the others who
are on this bill, we could work out a bill that would make a real
difference.

And let me say, one of the important things, I think,
about the Daschle bill is that it really heavily emphasizes the
importance of child care. As I look back over the time that has
elapsed since, as a governor, I worked on the welfare reform bill of
1988, if you ask me what its single biggest shortcoming was, I would
say that we should have done more in child care.

And if we do what I have suggested here -- and I think a
lot of the Republicans want to do this -- and we take all these
various training programs and put them into a big block and let
unemployed workers access them, then that could help to provide the
training money for an awful lot of people on welfare who want to move
to work; so that if the Daschle bill itself or any future
amplification of it that could have bipartisan support in the Senate,
could really focus on child care, I think we could get a welfare
reform bill that is tough on work and good for children, instead of
the other way around.

So I would urge all of you -- especially the Republican
mayors -- you have a lot of allies in the Republican Party in the
Senate; welfare reform ought to be a bipartisan issue. If we could
get a good bill out of the Senate, I feel confident that we could
have a bipartisan majority in the House that would vote for it as
well if we could get it out of the conference committee.

So that is what I would implore you all to do. This is
a huge deal for the United States. And the Daschle bill is an
opening, an outreach for a genuine bipartisan compromise that doesn't
just dump a lot of money back on the states and localities -- excuse
me, a lot less than you used to have in a way that would lead to
people being cut off with nothing good happening.

MAYOR DALEY: Mr. President, we all as mayors want
to thank you for standing with us on the issues of crime and
violence. You have heard not only from mayors, but the police chiefs
and citizens of what we in the cities have been trying to do to fight
crime.

From your kept promise, and you've done this, providing
over 100,000 new cops, signing the Brady Bill, signing the assault
weapons ban, you have been there to help us in our efforts to both
fight and prevent crime. And your Department of Justice has done an
excellent job in implementing the cops program in last year's crime
bill.

Given the uncertainty in Congress over the future of
crime legislation, how can we work together with you in your
administration to assure that the funding is there on as flexible a
basis as possible for our policing and our prevention efforts?

THE PRESIDENT: I think, Mayor, what you have to do is
to, again, emphasize in the Senate where this is being debated and
ultimately in the conference committee that we need to have more
flexibility for the cities, but that it is unacceptable, at least for
me and I hope for many of you, to come off of our commitment on
100,000 police.

I have watched many panels and I've seen a lot of your
mayors on C-Span. You know, I actually get to watch you as well as
you watching me, and I know that some of the mayors believe that
we've been too firm on the police requirements because some cities
have already increased their police forces and can't take maximum
advantage of this. But I have to tell you I think there is a
national interest in increasing the police forces of this country by
about 20 percent. And, after all, this crime bill was funded by a
reduction in the national employment -- people in the federal
government.

On the other hand, I have been strongly in favor of
absolutely maximum flexibility for you in other aspects of the crime
bill and would be in favor of even more flexibility in other aspects
of the crime bill as long as we don't undermine our commitment to
100,000 police. If we can get more flexibility in the other areas of
prevention and imprisonment, I would be in favor of it. I will work
with you to do anything I can in that regard.

MAYOR HELMKE: It's good to have the opportunity to talk
to you again, Mr. President.

THE PRESIDENT: Thank you.

MAYOR HELMKE: We all realize that regardless of whether
the budget's balanced in seven years or 10 years there's going to be
less money coming to cities from the federal government. We believe
strongly that the issue of flexibility beyond just the crime bill is
important to us in terms of helping us find efficiencies at the local
level.

In January, Speaker Gingrich spoke to us about a
contract with cities. I know that the Vice President has talked to
some of our officers with some of his ideas on flexibility and
opportunities for efficiency at the local level. I'm curious as to
your thoughts with regard as to how we can find more efficiencies,
more flexibility and work together with both sides of the aisle as
well as officials at the federal level, the local level to help
cities as we go through this process so we can meet the human needs
that are very real in all of our cities.

THE PRESIDENT: First of all, Paul, let me say that I
think that we have to do this. I didn't give you any specific
numbers in my remarks, but let me tell you that even with a 10 years
balanced budget plan, if you don't cut education and if you have a
tax cut much smaller than the ones contemplated by either the Senate
or the House, it would still require about a 20-percent overall cut
in other discretionary spending because we're all at about the same
place on where we think defense ought to be.

Now, that's over a 10-year period -- for my budget at
least. What I think we need to do here is, before this budget is
actually passed in the fall, or in late summer, but probably be in
the fall, we need to know before the budget is passed what the new
arrangements with our cities will be.

Now, let me just give you one example. I would like to
preserve the community development block grant program. If we can, I
have proposed it to be continued at the present level of funding in
1996. The Senate budget resolution proposes to cut it in half.

What I think we ought to do -- and I know -- by the way,
I wanted to compliment Secretary Cisneros. He has been waging a very
strong fight within our administration to try to make sure that the
cuts come in other areas and the community development block grant
program is preserved at its present level. We could do that.

You might argue that we could even increase it if some
of the other categorical programs were folded into it so that if we
are going to go forward here, maybe some new purposes should be added
to it. I am open to all that. I want to reduce regulation. I want
to increase your flexibility, not just for the cities, but for all
local units. We just announced a 40-percent cut in the regulations
of the Department of Education, for example. Most of you don't run
your own school districts, but some of you do, and that will be
important to you.

We are moving in the right direction here. But I think
we have got to be willing, before this budget is passed, to sit down
with the cities and, in fairness, also with the states and the
counties, and try to design what the new agreement will be about this
money and how it's going to be funded. And I think there are great
opportunities for you to get some more flexibility and for you to
determine how we ought to do it. And I am more than willing to go
forward with you on that basis.

MAYOR ASHE: Mr. President, we thank you very much for
giving us this opportunity, and we will take the challenge to respond
and open up a dialogue that really moves this country forward in the
interest of cities and the people that we represent.